Tuesday, December 8, 2009

A New Public Option Pt. 2

In the previous blog entry, I pointed out the Senate is working on a plan to let the general public enroll in a health insurance plan similar to what federal employees get in the FEHBP. The Urban Institute wrote a study critical of how that might be achieved. Here are my interpretations of those criticisms.

The study said that Democrats in Congress and President Obama object to the fact that the public who would enroll in the FEHBP may not be able to afford the plans, therefore they would receive higher subsidies than what federal employees get. And that is JUST NOT FAIR. I guess these policy wonks really don't live in the real world. Here, when we buy insurance, healthy people pay more to subsidize sicker patients who actually use their insurance plans. That's what's called risk pooling. And my tax dollars have been subsidizing Medicare enrollees ever since I started working.

The Urban Institute also said there is a misperception about how generous the FEHBP benefits really are; they are not the Cadillac plans many people think. They are no more generous than the plans that large private employers offer. Well thank you very much. Not all of us are lucky enough to work for large private employers. Most people who would enroll in an FEHBP-like plan would be poor or self employed, like myself. We don't have the luxury of generous benefits. We choose the cheapest plan we can afford. So being allowed to enroll in a federal plan would be a huge step up for most people.

Other nit-picky objections in the study include that the FEHBP is not really a public option; it is a subsidized plan to buy private insurance, such as Blue Cross. Okay, I can live with that. They can call it whatever they want.

They are concerned that many people who are not happy with their current private insurance would move to this new plan if it became available. Well yeah. That's called competition. Isn't that what Congress wants to give health insurance companies?

The people who move to a federal plan would be the sickest and poorest enrollees, potentially burdening the new plan with higher costs. Again that is called risk pooling. A federal plan would have one of the largest number of customers to spread the risk. And isn't one of the reasons we're talking about health care reform is because of all the horror stories of people without health insurance becoming bankrupt and destitute because of their health care expenses?

Finally all these new sick enrollees would create a burden on the Office of Personnel Management, the federal department that determines the benefits offered in the FEHBP. I say that is their job. If they are unable to handle an influx of new enrollees, then fire them and find somebody who can.

It seems like the Senate may be onto something here. This could potentially please both sides of the aisle. We have a quasi Public Option to satisfy the Democrats while Congress would be forced to use the same health insurance plans as the public which would appease the Republicans. Let's hope no distracting sideline issues like federal funding for abortions and religious spiritual treatments trip up this progress.